Retirement Planning

We provide extensive retirement planning services including work vs. retire “gap analysis,” 401(k), 403(b) and 457 retirement plan rollover analysis, retirement cash flow reviews, inflation adjusted withdrawal strategies, lump sum analysis and required minimum distribution calculations.

  • Financial Goals

    The primary financial goal of most people is to have enough financial security to be able to retire with a safe income stream that increases with inflation to keep them healthy and happy for their lifetimes (sometimes their kids’ lifetimes as well.) The initial step of retirement analysis is to determine ‘critical capital’; or the amount needed in dollars to provide a flow for life. The amount needed should include inflation (and we think a provision for retirement health care), as well as future taxes in retirement, such as the taxes on eventual IRA distributions. Flows like Social Security and pensions are factored in, and the critical capital is calculated using a conservative rate of return. This step helps us determine what amount of money you need after taxes to live a good life, factoring in inflation, for as long as you may live. (Actually, we make the calculation based on an infinite time frame, rather than try to predict your life expectancy: it’s easier and although unrealistic, has a nice ring to it.)

  • Critical Capital

    Once we determine Critical Capital, we can find the right vehicles for achieving success in obtaining it. In our opinion, the major enemy in retirement is inflation, and the major enemy in pre-retirement is taxes. We think qualified tax-deferred saving vehicles like 401(k), 403(b), 457 plans, and IRAs are powerful wealth accumulation tools. The use of tax-deferred vehicles allows a high level of saving efficiency due to the tax savings. With the prospect of high future income tax rates, we also include Roth IRAs into our calculation, including the prospect of a Roth Conversion (where you turn an existing IRA into a Roth). Roth’s have the advantage of tax-free withdrawals and allowing tax-free investment compounding. For those at Critical Capital (you have enough to retire), we help facilitate a rollover to an IRA when advisable and model a mix of assets to make an income stream (or build capital, as the case may be). For those with a ‘gap’ in Critical Capital, we provide options on reaching the goal, including increasing savings, modifying assets, or changing retirement dates. This step is intended to get you to and through retirement with lower taxes and lower risk.

  • Risk in Retirement Planning

    Another key notion of retirement planning is the aspect of risk. Risk, in investment terms, is defined as the volatility of a portfolio’s return. Volatility is the level that a portfolio’s return moves, in both directions, up and down. In the early phases of your financial life, when you are accumulating wealth, risk is beneficial. Dips present buying opportunities, and rises present rebalancing opportunities. As you get to the point where the amount you’ve invested generates more income and reinvestment than you contribute (a point we call ‘critical mass'), then risk starts to diminish the benefit of the buying opportunities and you should change the allocation to lower the risk. When you are withdrawing from the investment pool (like from an IRA when you reach 70 ½), downside risk can be fatal to the portfolio’s health. An essential function of retirement planning that we provide is to look carefully at the withdrawal rate and the risk level of the investments to achieve that withdrawal rate.

  • Medicare Planning

    Let us help you decide how to manage health care costs. There are several considerations in choosing a medicare plan suitable for your needs. We are concerned with managing risk, extent of coverage, prescription coverage and the fine-print details of Medicare Part A, B, C and D. Use the resources below to get acquainted with the programs.

    Healthcare Planning (LJPR)